Turkey Freight Transport Report Q3 2009

The European Commission (EC) said in early July that it had been invited by Turkey to take part in a signing ceremony for the Nabucco gas pipeline agreement, to be held later in that month, in the Turkish capital of Ankara. Nabucco is an inter-governmental agreement for the construction and operation of the 3,300km-long pipeline. Once the pipeline is brought into operation it is expected it will reduce Europe's dependence on Russian gas supplies; and because of that it has had the support of the European Union.

The pipeline will link gas suppliers in the Caspian region, the Middle East and Egypt, through Turkey, Bulgaria, Romania, and Hungary to Austria, with further onward connections to Central and Western Europe. It will start at the Georgian/Turkish and/or Iranian/Turkish border, leading all the way to Baumgarten in Austria. According to current feasibility studies, it will have the capacity to pump 31bn cu m of gas per annum. The total cost is estimated in the region of EUR7.9bn (US$11.1bn); at present its estimated completion date is 2014.

In our latest Turkey Freight Transport Report, BMI concludes that freight carried across all modes of transport, measured in million tonnes-km (mn tkm) is set to grow by an annual average of 2.2% across the 2009-2013 forecast period. Various factors support this prediction. As a result of the current sharp recession Turkish economic growth, will average 1.8% per annum in the next five years, less than half the 6.1% rate achieved in the preceding five years. More importantly, however, Turkey is set to become a pipeline hub for Europe. The BTC (Baku-Tblisi-Ceyhan) and the Nabucco line are among several projects, initially devised to meet Turkish energy demand, that have also drawn growing European interest as a gas supply route from the energy-rich Caspian. Among other plans for the energy corridor are an oil pipeline between Samsun on the Black Sea and Ceyhan, as well as two gas pipelines from Russia, which wants to extend the Blue Stream pipeline to Israel. Turkey receives gas via a pipeline from Iran, while the Shakh-Deniz project, now functioning, is bringing Azerbaijani gas from the Caspian to Turkey.

Pipeline developments offer a ray of hope against a generally subdued outlook for the freight sector as a whole, because of the adverse international economic climate in 2009. By the end of the forecast period to 2013, sea freight is anticipated to be the largest sub-sector, accounting for about 59% of all shipments, compared with 35% for road freight. By transport mode, we expect the fastest growing to be airfreight (annual average of 4.1%), followed by pipeline throughput (2.7%) and maritime cargo at 2.4%, road haulage at 2.1% and rail freight at 1.1%. With a score of 58.8 out of 100, Turkey's overall freight rating is just above the average for the Middle East and Africa (MEA) region. Turkey scores well in terms of infrastructure growth, regulatory and competitive environments and the transport intensity index.

For the 2009-2013 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 2.1%, versus 1.8% for overall GDP. The total value of transport and communications GDP will rise to US$100.1bn in nominal terms by 2013, representing 11.4% of Turkey's GDP.